Abstract [en]

In 2010, the audit obligation in Sweden was abolished for smaller companies; the purpose of the abolition was cost savings reasons especially for small companies, which will make them more competitive. The new rules covered about 70 percent of all Swedish companies. If the benefits of audit outweigh the costs, are a topic discussed. Many studies have found that the cost for the audit are also justified for smaller companies and are important for example credit evaluation. While others believe that the benefit of audit does not outweigh the cost for small companies. Some managers in small companies do not think there is any correlation between audit and creditworthiness. These contradictions led us to our purpose of this report, from the perspective of the creditors, to gain knowledge of the significance of the audit in credit and how it affects creditworthiness. Our question was: How was the creditworthiness of smaller companies influenced when they choose not to hire an audit accountant? We chose to use a qualitative study with interviews as a method because we think it was the best way for us to answer our research question. Our interviewees consisted of eight different creditors whom we have interviewed through personal interviews, telephone interviews and some by email. We recorded all the interviews and categorized the answers, then we used an interpretative approach when analyzing the material. In our theory section, most of the articles we found highlighted that even small businesses benefit from auditing. However, some interviewed asked whether the benefit of the audit exceeds the costs and that the independence of the auditor is something that should be questioned more in smaller companies. Our empirical evidence showed that the financial reports are of a higher quality and become more credible if an auditor reviews them. Our defendants did not experience a problem with independently in smaller companies. Most considered that the majority of the loan applicant has an audit accountant but it did not automatically give a lower cost to the loan. Some of the interviewed people thought that revised financial reports is the most important thing about lending, while others felt that the people behind the company and their relationship are the most important. The cause behind banks different decisions believed our respondents were due to the bank's risk profile, experience and industry knowledge. Our conclusion was that there is a big difference between the banks, but we interpreted that the personal characteristics of the owner as entrepreneurship, driving, knowledge and a long-term relationship with the bank are the most important factor for accessing capital. Audited reports are just an additional security but do not generally affect the creditworthiness of the company.